The COVID-19 pandemic has raged worldwide for almost two years, and Vietnam has been hit hard, particularly the country’s economic capital Ho Chi Minh City. The Vietnamese government has recently initiated a plan to ease lockdown measures to boost economic recovery in response to the continuously decreasing daily number of infections, now numbering under 10,000, reflecting a change in the government’s strategy from “Zero cases of COVID-19” to “Adapt to living safely with the pandemic and control the spread of the virus.”

Earlier Vietnam had imposed strict lockdown measures for cities with high infection rates. To maintain social distancing, strict shelter-in-place measures were applied and government authorities distributed food and supplies to every household. If anyone needed to go outside their home, they had to submit a letter seeking permission to do so. Permission was granted for only two hours per day in a neighborhood. These stringent lockdown measures had a severe impact on the domestic economy, with many businesses and factories closing due to commuting restrictions. As a result, Vietnam’s economic growth forecast has dropped from the previous 6.5% to around 3.5-4.0%.

Vaccination statistics reveal that as of October 10, 2021, only 15.27% of the Vietnamese population was fully vaccinated, and only 39% had received the first dose. This was ASEAN’s second-lowest vaccination rate after Myanmar, according to data appearing in Reporting ASEAN as of October 7, 2021. Vietnam aims to fully vaccinate 70-75% of its 98 million population by the end of 2021, which is rather challenging.

Investment-wise, Vietnam remains an interesting attraction thanks to its trade and investment promotion policies and free-trade agreements (FTAs). The country hopes for a good opportunity to welcome new investment projects following the New Normal, with everyone needing to adapt themselves to living safely amid the pandemic.

The Vietnamese government has recently eased lockdown measures for cities where the situation is improving. Since mid-September people have been allowed to commute and resume their usual lifestyles while maintaining social distancing, with the nation’s capital Hanoi set to ease lockdown measures after September 30. Tourism in world heritage destinations, including Halong Bay, Hoi An, Dalat, and Nha Trang beach will resume in December for fully vaccinated tourists from low-risk countries, while tourism nationwide is expected to fully resume in June 2022. This will be quite a challenge for the Vietnamese government, which will be judged on how well it can handle upcoming situations while focusing on both economic and pandemic control issues at the same time.

SCB has overseas branches in Cambodia, Laos, Myanmar, and Vietnam (CLMV) ready at your service if you are interested in doing business in the Greater Mekong Subregion (GMS). For more information, please visit https://www.scb.co.th/en/corporate-banking/international-network.html

Information courtesy of the SCB Ho Chi Minh City Branch https://www.scb.co.th/vn/corporate-banking.html

References:

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